{"id":7182,"date":"2008-02-22T00:00:00","date_gmt":"2008-02-22T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"hedge-funds-private-equity-groups-ultra-wealthy-families-alternative-investors-and-corporate-tax-credit-buyers-discover-section-181-deal","status":"publish","type":"post","link":"https:\/\/www.hedgeco.net\/news\/02\/2008\/hedge-funds-private-equity-groups-ultra-wealthy-families-alternative-investors-and-corporate-tax-credit-buyers-discover-section-181-deal.html","title":{"rendered":"Hedge Funds, Private Equity Groups, Ultra Wealthy Families, Alternative Investors, And Corporate Tax Credit Buyers Discover Section 181 Deal"},"content":{"rendered":"
Imagine investing in an alternative investment where you have a 
guaranteed rate of return of 35%-70%, before revenues. Lets also kick in 
100% Federal Tax Deductions of said investment against ordinary income 
that has a higher premium and same year incentives vs. New Markets Tax 
Credits. Sound too good to be true?

A Chicago film finance, production, and distribution company, Noci 
Pictures Entertainment, is putting a slate of films using an innovative 
hybrid tax, finance, risk minimization, and exit strategies that in some 
instances can offer a dollar for dollar Federal Tax Deductions, state 
income tax credits or rebates, a possible exit IPO on the London AIM., 
equity in a slate of films, as well as stimulating local economic 
development, and creating jobs, including for women and minorities.

“I don’t know of any other alternative investment that can offer tax 
incentives, multiple exit strategies, as well as giving back to the 
local economy, while being involved with the moviemaking process", 
states Yuri Rutman, the head of Noci Pictures. “That would also add to 
the long line of recent film funds that have been structured with 
numerous hedge funds, private equity investors, corporate tax credit 
buyers, and institutions".

On the institutional side, familiar names such as CITIGROUP, Deutche 
Bank, JP Morgan, Morgan Stanley, Dresdner Kleinwort, GE Commercial 
Finance, ABRY Partners, AIG Direct Investments, Bank of America Capital 
Investors, Columbia Capital, Falcon Investment Advisors, and M\/C Venture 
Partners are all involved with the finance of films.

Familiar individuals who are financing films include Larry Ellison, Paul 
Allen, Steven Rales, Fred Smith, the CEO of Federal Express, Norman 
Waitt, the Co-Founder of Gateway Computers, Jeff Skoll Of Ebay, Marc 
Turtletaub of The Money Store, Roger Marino Of EMC Corp, Sidney Kimmel 
Of Jones Apparel Group, Minnesota Twins owner Bill Pohlad; Real Estate 
Developers Tom Rosenberg, Bob Yari; and, financiers Sheikh Waleed Al 
Ibrahim, Zeid Masri of SilverHaze Partners, Michael Singer, Mark Esses, 
David Larcher, Michael Goguen, Richard Landry, Michael Reilly, Rafael 
Fogel, and Philip Anschutz

The American Jobs Creation Act Of 2004, the 2004 enactment of Section 
181 of the Internal Revenue Code of 1986 (the "Code") marked an 
unprecedented change in U.S. policy toward the phenomenon known as "Runaway
Production".

Runaway Production refers to a film or television production that leaves 
one state or country to be filmed in another purely for economic 
reasons. This movement occurs because producers tend to film in the 
location where they can minimize production costs through tax 
incentives, cheaper labor.

Over the years, Canada has been the greatest beneficiary of U.S. runaway 
productions (according to some reports, Canada has claimed up to 80% of 
the U.S. runaways, generating an economic impact of $10.3 billion in 
production output in 1998 alone).

Section 181 represents the first time that the U.S. federal government 
has recognized this impact by passing tax legislation to actively combat 
the flight of film and television programming.

Section 181 permits a 100% write-off for the cost of certain 
audio-visual works, regardless of what media they are destined for 
(e.g., theatrical, television, DVD, etc.).

An individual or company who makes an investment into Section 181 
qualified productions can take a 100% deduction of their investment 
against their passive income in the year their investment was made.

The deduction can be made against active income should the investment be 
made by or through a widely held C corporation. The law is in effect 
until December 31, 2008, therefore investments must be made before that 
date and the money invested into qualifying productions must be spent by 
then by the productions.

Rutman stressed that “As an example, should an individual or corporation 
that is taxed at a 35% tax rate have passive income to take a deduction 
against, then should that individual make a $1 Million investment into a 
qualified production or film fund, the actual net investment will be 
$650,000 since they can take a deduction against that full $1 Million 
against their passive income, and 35% of $1M is $350,000, which is the 
value of the deduction they can make in the year they make their 
investment.

But since Section 181 also allows for all other debt costs which are 
usually associated with film finance, a $10 million dollar film, where 
only $3.5 million is equity, an investor can deduct $3.5 million dollars 
against the $10 million, especially if the latter is mezzanine or gap 
finance.

Plus, an additional 20%-40% in state tax credits or rebates can be 
generated back to the Investors, before revenues. The State of Michigan 
now offers a 40% cash rebate for making a movie there, which is the most 
aggressive in the country. That translates to an additional $4 million 
in rebates to an investor based on a $10 million dollar film.

"Its all about leverage. I don’t know of any industry in the world where 
you have an investment indirectly guaranteed by the government in order 
to stimulate jobs and economic development at such high yields".

”I am also surprised how many investors, hedge funds, VC, tax planners, 
CPA’s, tax attorneys, public and private companies have no clue about 
these benefits”, Rutman adds. “Federal Preservation, New Markets Tax 
Credits, etc was the usual route for tax planning, but film production 
incentives offer a more liquid premium, equity, as well as little 
Hollywood adventure and schmoozing with movie stars".

Contact:

Yuri Rutman

Noci Pictures

www.noci.com <http:\/\/www.noci.com<\/a>>

yuri@noci.com<\/a> <mailto:yuri@noci.com<\/a>>
Chicago, IL

Tel:310-651-0799<\/pre>\n","protected":false},"excerpt":{"rendered":"
Imagine investing in an alternative investment where you have a guaranteed rate of return of 35%-70%, before revenues. Lets also kick in 100% Federal Tax Deductions of said investment against ordinary income that has a higher premium and same year […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-7182","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/7182","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=7182"}],"version-history":[{"count":0,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/7182\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=7182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=7182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=7182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}